Phillips 66 to sell 432-acre campus in Louisville

By Alicia Wallace, Camera Business Writer

Posted:
10/17/2012 12:35:17 PM MDT

"No trespassing" signs are posted on a temporary gate across the road leading to the ConocoPhillips property in Louisville. Phillips 66 plans to sell the property, which was planned for a "world-class" research and training campus expected to bring thousands of jobs.
(
MARK LEFFINGWELL
)

A 432-acre property in Louisville that was intended to house a "world-class" research and training campus -- a facility heralded for its potential to bring thousands of jobs and an economic boom -- is back on the market.

Phillips 66, the Houston-based energy firm that earlier this year spun off from ConocoPhillips, plans to sell its property off U.S. 36, Louisville officials announced Wednesday.

ConocoPhillips purchased the site -- which long served as a campus for Storage Technology Corp. and, later, for Sun Microsystems Inc. -- in 2008 with the intention of building a global training center and research and development campus.

After ConocoPhillips (NYSE: COP) split into two publicly traded firms earlier this year and the Louisville site landed in the hands of Phillips 66 (NYSE: PSX), the property's new owner didn't share the same goals. And on Tuesday morning, Phillips 66 officials picked up the phone to relay that information to Louisville Mayor Bob Muckle.

"The uses that ConocoPhillips originally envisioned for this site don't really fit into Phillips 66's long-term plans at this time," Muckle said.

As a result of the reorganization, Phillips 66 acquired the research facility in Bartlesville, Okla., and moved forward on plans to establish an international training center at its new corporate headquarters in Houston, Muckle said.

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Louisville officials were "disappointed" by the decision, but Muckle said he remains optimistic about the site's future.

"On the other hand, I was concerned that one of the possibilities was they would not move forward and not decide what to do with the property, and leave the property languishing," he said. "Frankly, it's probably the best ... large, developable site in the Denver area."

Louisville city officials said Phillips 66 has not yet listed the property but "plans to do so shortly."

"After careful consideration of the needs of the new company and its employees, Phillips 66 has decided to sell its 432-acre property in Louisville, Colo.," Phillips 66 spokesman Rich Johnson said in a statement. "Phillips 66's predecessor company, ConocoPhillips, purchased the Louisville property in 2008. As a result of the repositioning of ConocoPhillips into two independent energy companies, the Louisville site became an asset of Phillips 66."

In a response to follow-up questions from the Camera, Johnson said he could not add much other than to say Phillips 66 is reviewing options to identify a broker to market and sell the site.

"(Phillips 66 is) going to work with us to try to find a buyer that's compatible with our community and good for our region and not just sell it to the first person that comes along," he said.

Big bets

Despite the site's inactivity to date and the uncertainty as to how long it may remain that way, Louisville's revenue position remains largely unchanged, Muckle said. Although projections were made that the campus would contribute about $1.5 million annually to the city coffers, the city never assumed any revenue nor made modifications to its budget, he said.

Others in the private sector, however, bet big on the potential boon.

ConocoPhillips' expected arrival spurred a flurry of commercial activity in the areas surrounding the campus. Hotels and multifamily housing projects were built in anticipation that the project would generate patrons, residents and revenues.

Etkin Johnson Group's website for the Broomfield Business Center -- a 74.3-acre mixed-use development near the Northwest Parkway -- touts the planned arrival of its neighbor: "The site is located just east of the ConocoPhillips Global Training and Technology Center that is scheduled to open in late 2015."

Broomfield officials were also disappointed but remained optimistic about what could come from the sale.

Etkin Johnson moved forward on building 330 rental units after Phillips 66 took over the site and the campus' future was put in question, said Kevin Standbridge, Broomfield's deputy city and county manager. An active regional economy, he added, also appears to be bolstering interest in the city's commercial sector, notably the nearby Flatiron Marketplace.

The region's residential real estate market was put into a "frenzy" when ConocoPhillips was announced as the buyer, said Rick Staufer, Realtor and co-owner of Staufer Team Real Estate in Louisville. Prices jumped but since have settled down to realistic levels, he said.

In addition to its size and locale, the fact that the 432-acre site is "shovel-ready" and zoned for industrial and office purposes makes it an attractive property to market, said Tom Clarke, CEO of the Metro Denver Economic Development Corp.

Noting the Denver metro region landed 10 corporate headquarters this year -- and has been averaging six to 10 headquarters since 2003 -- Clarke said he likes the area's chances of attracting a firm of high pedigree.

The bulk of that activity lately has been in technology and financial services, he said.

"Probably, for that site, it would be more of a tech play than a financial services play," he said.

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